Inspecting Spotify
What Ingredients are in This Ear Candy?
News Detectives like to investigate (examine) our media channels, platforms, publications and websites that influence us all in one way or other.
Because it’s important to know who or what is behind the news you consume, how they make the sausage, and what makes them tick.
Spotify continues to dominate the news headlines, so I thought this would be a great time to look under Spotify’s hood to understand better this streaming platform that so many use for podcasts, audiobooks, and music consumption.
The number of people using podcasts to get their news continues to grow exponentially. A 2020 report from the Pew Research Center found that 43% of respondents said they get their information from podcasts on their smartphone, computer, or tablet.
Spotify will continue to gain more subscribers wanting news content, so let’s look at the company paying Joe Rogan $100 million.
The Swedish Fish of Audio Streaming
Swedish Fish is a candy that started in Sweden back in the 1950s. It is still popular today. Unlike French fries (which are not French) - Swedish Fish get made in Sweden.
It’s hard to know for sure when so many companies get bought out, but I do think there is a good chance Spotify will still be a famous brand 70 years from now, as the Swedish Fish candy.
On April 23, 2006, two Swedes named Daniel Ek and Martin Lorentzon founded Spotify.
Who is Daniel Ek?
He is a Swedish billionaire - currently 38 years old - who founded the company in Stockholm in 2006.
Ek started a website development business at age 13, charging $100 for a website and steadily increasing his rate to $5,000. Still a teen, the firm reached $50,000 per month, and he managed a team of 25 of his mates, who he persuaded to help him build websites by bribing them with video games.
Soon after this, Ek served in a senior role with Tradera, a Nordic auction company, which eBay acquired in 2006. Ek also was the CTO of a browser-based game and fashion community called Stardoll.
Ek is an entrepreneurial machine, it appears, as he was just getting warmed up.
Advertigo was an online advertising company founded by Ek and sold to TradeDoubler in 2006. Ek also became the CEO of μTorrent for a brief time.
Ek then incorporated Spotify in ‘06 after realizing the best way to deal with online piracy of music was to offer a better service than illegal sites like Napster - a web destination that compensates the music industry in the process.
Who is Martin Lorentzon?
The other Swedish entrepreneur who co-founded Spotify with Ek is Martin Lorentzon.
Born in 1969, Lorentzon studied industrial economics at Chalmers University of Technology and economics at the Stockholm School of Economics.
In the 1990s, Lorentzon moved to Silicon Valley, taking a job with AltaVista.
He founded a successful fintech company called Tradedoubler (not with Ek) and eventually sold his shares of Tradedoubler for US$70 million.
After ten years in the States, Lorentzon moved back to Sweden. In 2006, Tradedoubler bought Ek’s Advertigo.
When the two became friends and their shared experiences dealing with depression formed a bond that would lead them to co-found Spotify.
Political Beliefs
News readers following the Joe Rogan/Spotify saga are questioning the commitment Spotify will ultimately keep in their current pledge of allowing free speech and creative control to the content creators on their platform.
Without personally interviewing Ek and Lorentzon, we can find online clues of the cofounder’s political beliefs that might help foresee what these two business owners will do with Rogan and other podcasters on Spotify.
Each Wikipedia page for Ek and Lorentzon has a small section called “Political Views.”
Here’s a condensed overview of Ek’s Lorentzo’s political views found on Wikipedia:
In 2016, Ek and Lorentzon co-wrote an open letter published on the blogging platform Medium to the Swedish government. The letter called for specific changes to Swedish law in housing, taxes, and education. The letter declared that Swedish taxes were too high on stock options, making it harder for startups to compete with more prominent companies. The letter also called for fewer regulations that Ek and Lorentzon claimed limited affordable housing availability.
Interestingly, the two proud Swedes threatened to re-locate Spotify out of Sweden in the letter if their desired changes didn’t happen. Not sure if their letter made a difference, but Spotify still sits in Stockholm.
In 2013, Lorentzon was involved in Prince Daniel’s Fellowship Exchange. He visits schools and colleges around Sweden, promoting entrepreneurship to young people.
In 2016, Lorentzon was elected to be on the Royal Swedish Academy of Engineering Sciences, under the country’s Dept. of Education. This program promotes “contact and exchange between business, research, and government entities.”
In 2013, the Swedish media began reporting on Lorentzon’s relationship with the Swedish tax office. Spotify and other companies Lorentzon is or was involved with at the time were situated in offshore financial centers. Spotify was registered in Luxembourg, where the tax rate is lower.
Lorentzon was assigned a prominent role in the Moderate Party as an expert on immigrants’ integration issues.
This background history on the political activities of Spotify’s two cofounders doesn’t give us a clear indication of how tenacious they will be advocating for free speech and creative freedom.
A bent toward entrepreneurship still indicates a person who favors lower taxes and less regulation. These two gentlemen do have a history of speaking out on those issues.
But it’s hard to say for sure at this point what Ek and Lorentzon will do or how solid Spotify will remain in their backing of Joe Rogan.
I’m going to wrap this post up for now. However, I will continue my deep dive into Spotify and share any additional findings that I think are important or fascinating discoveries for News Detectives readers.
Ciao for now.
MKL
Great article. Very interesting how Spotify came to be and will continue to be interesting to see where it goes.
Fantastic well written article!